Principles-based legislation: the impact on financial instruments

As HMRC consults on a move towards a principles-based approach to tackling tax avoidance on financial instruments, Neil Edwards and Graham Robinson examine the implications.

Introduction

On 6 December 2007, HM Revenue & Customs (HMRC) published a consultation document entitled Financial Products Avoidance: Consultation on Principles-based Legislation , containing draft legislation intended to close down two areas of tax planning with financial instruments frequently used in the UK. The consultation document was followed on 8 January 2008 by an open day at which HMRC officials discussed the proposals. Revised draft legislation and guidance were issued by HMRC on 7 February 2008 and a further open day is to be held on 21 February. The authors will consider the implications of these changes in next month’s issue.